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VW union stages massive protest against Porsche and EU

AFP · 12 Sep 2008, 12:04

Published: 12 Sep 2008 12:04 GMT+02:00

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The IG Metall union said some 40,000 employees took part in the rally, which was officially to oppose European Commission’s moves to do away with a law protecting Europe’s biggest carmaker from hostile bids.

“We don’t need less VW law but more,” IG Metall head Berthold Huber told a flag-waving crowd clad in the union’s yellow and red colours. But the show of force was also aimed at Porsche, the sportscar maker that this year plans to take control of VW – a firm with 30 times as many employees – in a takeover that would have been unthinkable a few years ago.

Demostrators ranged from engineers in overalls to middle managers in suits, and many had come from VW factories in Germany as well as from Poland, Spain and Slovakia.

“If VW falls, the lights will go out in Lower Saxony,” said Matthias, who has worked at VW for 27 years, referring to the firm’s home state. The VW Law passed in 1960 effectively blocks another company making a hostile takeover bid for Volkswagen as it gives Lower Saxony state a blocking minority over major company decisions.

The European Commission has taken a dim view of the law because Lower Saxony only holds a 20 percent stake in VW. Normally a blocking minority is only accorded to those with more than 25 percent. The law is defended by Germany’s federal government, but in October the European Court of Justice ruled that it violated EU competition laws. Berlin redrafted the legislation following the EU objections but maintained Lower Saxony’s effective veto, and EU Internal Market Commissioner Charlie McCreevy this week announced new court action.

“Blinkered neo-liberals like McCreevy are destroying Europe’s future,” IG Metall’s Huber told the crowd. The union, which represents 90 percent of VW employees, fears that a takeover – hostile or friendly – would endanger jobs and conditions.

The demonstration took place on the same day as a meeting of VW’s supervisory board in Wolfsburg at which the law was due to be on the agenda. But workers at the company, which last month said it had overtaken US giant Ford to become the world’s biggest automaker behind General Motors and Toyota, also have Porsche chief Wendelin Wiedeking in their sights. Stuttgart-based Porsche already owns more than 30 percent of VW’s capital and is due to make an offer to buy the rest of the much larger firm.

It is a deal that would see a family-controlled company that makes 100,000 expensive sportscars a year take over a national institution that churns out five million vehicles annually. But relations between worker representatives and Wiedeking, who already holds a seat on VW’s board, are poor, with the Porsche boss already warning there would be no “sacred cows” once his firm is in control.

Story continues below…

German media reports last week spoke of a possible departure of Wiedeking, one of Germany’s best paid executives, who could be sacrificed by the head of VW’s supervisory board Ferdinand Piech to appease unions. Piech, who is a co-owner of Porsche, was said to be highly irritated by tense relations between Wiedeking and the unions, who for historical reasons wield significant influence over company decisions. VW works committee boss Bernd Osterloh has slammed the “arrogance of an absolute monarch,” and called Wiedeking a “dilettante.”

But there are several battles being fought. The IG Metall union chapter at Porsche, for example, is in favour of the VW takeover, with its head, a former boxer named Uwe Hueck, repeatedly voicing support for the move. In addition, a cousin of Piech, who represents the other branch of the Porsche family, Wolfgang Porsche, is reportedly a strong supporter of Wiedeking. Nothing so far has indicated Wolfgang Porsche is ready to dump a boss who has turned the maker of the 911 sports car into the most profitable auto maker in the world.

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